Guardian Life Insurance Review

December 28, 2023
Written by: Steven Gibbs | Last Updated on: December 29, 2023
Fact Checked by Jason Herring and Barry Brooksby (licensed insurance experts)

Insurance and Estates, a strategic life insurance provider composed of life insurance professionals, is committed to integrity in our editorial standards and transparency in how we receive compensation from our insurance partners.

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At Insurance and Estates, we provide our readers with the facts needed to make the right choice regarding the top whole life insurance company and plan they choose. In the following Guardian Life review, we will cover the strengths of the company, its ratings, its history and its various products and features. Is Guardian the right company for you?

Review of Guardian Life Insurance Company of America

When seeking out the best life insurance provider, it is important that you take an inventory of your needs, goals and objective. With over 800 companies offering life insurance and annuities trying to locate the single best option is overwhelming. That is why we have put together our top picks for the best dividend paying whole life insurance companies, of which Guardian Life is a part of.

Highlights from The Guardian 2022 Annual Report

The Guardian 2022 Annual Report highlights the company’s focus on innovation, customer-centricity, and financial strength amidst economic challenges. Key highlights include:

Business Strategy:

Emphasizing consumer focus, innovative product offerings, and reimagining mutuality.

Wow the Consumer:

Enhancing understanding of customer needs and perspectives, introducing new products and services like annuity options and dental plans, and leveraging technology to improve customer experience.

Innovation & Transformation:

Digital innovation to improve consumer interactions, partnerships to enhance mental health care access, and rethinking existing products based on consumer insights.

Financial Highlights:

  1. Robust Financial Performance: Guardian achieved significant financial results despite economic uncertainties and market volatility in 2022. The company reported an operating income of $1.7 billion, indicating a strong and stable financial position.
  2. Premium Growth: The company witnessed a premium growth of 6% in 2022. This increase was attributed to higher renewals and sales, underlining the company’s ability to attract and retain customers and the market’s positive response to its products and services.
  3. Record Dividend Payment: Guardian approved a dividend payout of $1.26 billion for 2023 to its participating whole life policyholders, the largest annual dividend in the company’s 162-year history. This dividend reflects the company’s financial strength and commitment to sharing its success with its policyholders.
  4. Dividend Interest Rate Increase: Alongside the record dividend, Guardian increased the dividend interest rate to 5.75% in 2023, up from 5.65% in 2022. This increase is indicative of the company’s strong investment performance and prudent financial management.
  5. Solid Capital Position: Guardian concluded 2022 with over $11 billion in capital, demonstrating robust financial health and the ability to withstand market fluctuations.
  6. Credit Ratings Improvement: The report highlights improvements in Guardian’s credit ratings, emphasizing its financial stability and risk management capabilities. An increased Moody’s rating in 2022 and an improved Comdex score (99 out of 100) are testament to this.
  7. Investment Strategy and Portfolio Management: Guardian’s investment strategy, focusing on long-term value creation and diversification, played a crucial role in strengthening the company’s financial standing. This strategy includes maintaining exceptional liquidity and strong operating risk discipline.

Leadership Team:

Featuring a diverse team driving change in culture, products, and business practices.

Corporate Impact:

Focusing on environmental sustainability, governance, social responsibility, and responsible investing as part of the corporate impact strategy.

Investment Strategy:

Long-term investment approach with a focus on resilience and diversification, and strategic partnerships for growth and risk management.

Guardian’s partnerships, such as the investment in HPS Investment Partners and the reinsurance agreement with Talcott Resolution, were part of a strategy to manage risk, optimize capital, and pursue new growth opportunities.

Responsible Investments:

In 2022, Guardian established a responsible investment policy. This policy serves as a framework for embedding ESG considerations into their investment analysis, ensuring that environmental, social, and governance factors are consistently considered across their investment portfolio.

Guardian emphasizes the integration of ESG factors into their investment analysis and decision-making processes. This approach is intended to enhance long-term investment returns while managing risk for policyholders.

Guardian’s investment team actively seeks to diversify their investment portfolio, which includes commitments to responsible investments. This diversification strategy aims to generate strong risk-adjusted returns while maintaining a commitment to sustainability and social responsibility.

About Guardian

Guardian Life has been around for over 150 years. The company has a long, storied history as one the premier life insurance providers in the country. It is a Fortune 250 global financial services company.

The company boasts over $66.5 Billion in total assets under management. Further, the Guardian has over $600 Billion life insurance in force, making the Guardian Life Insurance Company of America one of the largest mutual insurance companies offering life insurance in the U.S.

What is a mutual life insurance company?

There are two types of companies out there: mutual and stock. A stock company operates first and foremost for the benefit of its shareholders. The shareholders represent the owners of the company and decisions are made in the best interest of those owners.

On the other hand, mutual insurance companies are owned by the policyholders. The participating policyholders earn a return of premium in the form of dividends based on the performance of the company. Mutual insurance companies operate in such a way as to maximize the value for the policyholders.

So which is best?

Being with a mutual company makes a lot of sense since the company is looking out for your best interest (maximizing policyholder value) rather than the best interest of the shareholders (maximizing stock holder value).

Guardian Life Ratings

As of December 2019, The Guardian Life Insurance Company of America financial strength, as measured by A.M. Best Company, is rated “A++, Superior” (highest rating), which signifies the company’s overall financial strength and claims-paying ability. In addition, Guardian also carries the following ratings:

  • A.M. Best A++
  • Fitch AA+
  • Moody’s Investor Service Aa2
  • Standard and Poor’s AA+
  • Comdex ranking of 99

In addition, Guardian’s BBB rating is A+.

Finally, in 2019 Guardian was recognized by J.D. Power for the ninth consecutive year for the company’s excellent customer service.

Guardian Products

Guardian Life offers products and services in five different areas:

Life Insurance
  • Term Life
  • Whole Life
  • Universal Life
Annuities

Guardian offers different annuities, with either single or flexible payments options.

  • Fixed Annuities
  • Income Annuities
  • Variable Annuities
Disability Income Insurance

Income replacement if you are unable to work due to being sick or injured. Replaces income if you’re too sick or injured to work.

Investments

Investment strategies are offered through Park Avenue Securities LLC, a Guardian-owned company.

Individual Dental Insurance 

Guardian Life Insurance Policies

Guardian Life offers both term life and permanent life insurance coverage.

Although there are benefits to all types of coverage, in our opinion there is a clear winner when accessing the benefits between term life vs whole life insurance.

Benefits of Term Life Insurance
  • Lower Initial Cost
  • Income Protection
  • Mortgage Protection
  • Conversion Option
Benefits of Whole Life Insurance

Guardian Life Insurance Policies: Different Plans and Features

Term Life Insurance

Guardian offers convertible term life insurance available for 10, 15, 20 or 30 years. The policy can be converted to universal or whole life insurance with no proof of insurability.

Universal Life Insurance

Universal Life provides flexible permanent coverage with both a death benefit and cash value growth. You determine your premium amount and timing of your premium payments. Your cash value can grow via interest credited from investment returns in the company’s general account.

Variable Universal Life

Variable Universal Life offers the benefits of Universal Life with an additional opportunity to grow your cash value through the allocation of premiums to professionally managed sub accounts or a fixed account. Your cash value growth is dependent on the performance of the investments in the sub accounts.

Universal Life Insurance Riders

Not all the riders listed are available for Variable Universal Life.

  • Cash Value Enhancement
  • Waiver of Specified Amount
  • Waiver of Monthly Deductions
  • Enhanced Accelerated Benefit
  • Accelerated Death Benefit
  • Guaranteed Insurability Option
  • Accidental Death Benefit
  • Disability Benefit Rider

Guardian Whole Life Insurance

Guardian Whole Life Insurance offers permanent coverage with guaranteed cash value growth.

Guardian practices direct recognition, which means the company adjusts the dividend paid to participating policyholders when there is an outstanding policy loan.

In our article covering infinite banking pros and cons we addressed the advantages of non-direct recognition vs direct recognition if you plan to use the policy for personal financing.

The main factor being that with non-direct recognition, you still earn your maximum dividend even with an outstanding policy loan.

Whole Life Insurance Guarantees

Whole life insurance is permanent coverage and offers specific guarantees, including:

  • Guaranteed death benefit,
  • Guaranteed cash accumulation* and
  • Guaranteed level premiums.

*Guaranteed cash value growth is based on an interest rate of 4%. Additional cash value growth is available through dividends. Although not guaranteed, Guardian has paid life insurance policy dividends to its participating policyholders since 1868.

Dividends are valuable and can be used to:

In November 2019, Guardian’s Board of Directors approved an $982 Million dividend to its individual life policyholders in 2020. This is the largest payout in company history. Guardian’s 2020 dividend interest rate is 5.65%.

Guardian’s historic dividend rates have been much higher. For example, back in 1989 the company’s dividend was 11.50%. Due to our current low interest rate environment all whole life insurance policy dividends have seen a dramatic decline.

We have been in a low interest rate environment for a long time so an increase in interest rates might be approaching. If so, you can expect the dividend interest rates offered by whole life insurance companies to increase.

Guardian Level Premium Whole Life Insurance

Guardian offers level premium whole life insurance to age 95, 99 and 120. In its most basic form, this is permanent whole life coverage where premiums must be paid to a certain age. The company coins their level premium whole life policies L95, L99 and L120.

Guardian Limited Pay Whole Life Insurance

You can choose limited pay whole life, including 10 Pay Whole Life and 20 Pay Whole Life. You make premiums for 10 or 20 years, at which time no more premiums are due.

Whole Life Insurance Riders

Guardian’s whole life policies come with different riders that add additional benefits to your coverage, including:

LTC rider: The LTC rider offers long-term care insurance in addition to the life insurance death benefit. You can access a maximum benefit amount which equals the lesser of 90% of the total death benefit or the policy face amount less $25,000.

Paid Up Additions: allows you to add additional premium payments to your policy to purchase “paid-up” life insurance, increasing your death benefit and cash value.

Index Participation Feature: this rider is exclusive to Guardian and allows you to allocate all or a portion of your cash value to receive a dividend adjustment based on the movement of the S&P 500 Price Return Index, subject to a cap and a floor.

Accelerated Benefit: you can access a portion of your death benefit for a qualifying terminal illness or chronic illness.

Guaranteed Insurability Option: provides you the option of adding additional life insurance with no evidence of insurability required. This is a great optional rider to add to life insurance for children as it will provide them the ability to increase coverage down the road, even if they have developed some sort of condition that would typically make them ineligible for coverage.

Waiver of Premium: a waiver of premium rider provides that if you become permanently disabled, the premium will be waived. This allows you to keep the whole life policy in force, even after you suffer a life altering disabling event.

Additional Benefits of Whole Life Insurance

The IRS has created many tax incentives for cash value life insurance. Whole life insurance is one of the best wys to take advantage of those tax incentives.

Tax free life insurance policy loans

You can access your cash value via life insurance loans from the carrier using your cash value as collateral are income tax free. Additionally, you can withdraw cash from your policy up to your basis without creating a taxable event.

A potential drawback of Guardian Life is the company charges 8% interest on policy loans for the first 25 years, after which time the interest rate charged drops to 5%.

Tax deferred cash value growth

Cash value life insurance grows tax deferred. If you practice proper policy management, you may never need to pay taxes on the cash value growth.

Paid up additions rider (PUAR) can also be used to increase the policy’s death benefit and cash value. However, when using a PUAR it is important to understand that overfunding a policy can result in the policy being considered a modified endowment contract (MEC).

Tax free death benefit

The death benefit from your policy goes to your beneficiary income tax free. A death benefit may be taxed is if your estate exceeds the federal estate tax exemption limit or you live in a state with an inheritance tax. Therefore, if you have a large estate, careful asset protection planning is necessary.

Guardian Life Insurance Review Conclusion

Guardian is a solid company that offers excellent product options. If you are in the market for life insurance you can’t go wrong with Guardian. However, at the end of the day they are only one of many options out there.

Have questions or would you like to see an illustration for Guardian or any of the other dividend paying life insurance companies we represent? Give us a call today for a free life insurance consultation with an advanced markets professional.

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11 comments

  • Ken Overdorf
    Ken Overdorf

    Follow up for previous email “Buy a Fixed Annuity NOW …
    I live in PA
    Ken

  • ken

    interested in purchasing a 3- 5 year Fixed Annuity NOW given the rates are reasonable.
    Can you help? Your Name ?
    Need info to make a sound decision: 856-297-9492 (after noon)
    Ken Overdorf

    • SJG
      A

      Hi Ken,

      One of our annuity experts should have reached out to you already. If you haven’t made contact, email Jason Herring at jason@insuranceandestates.com.

      Best, Steve Gibbs for I&E

      Steven Gibbs is a licensed insurance agent, and the following agent
      license numbers of Steven Gibbs are provided as required by state law:

      Resident License; AZ agent #17508301,
      Non-resident Licenses: TX agent #2273189, CA agent #0K10610,
      LA agent #769583, MA agent #2049963, MN agent #40563357,
      UT agent #655544.

  • Jacque

    I am interested in using IBC for personal financing. Guardian does not look good to me with a dividend rate of 5.65% compared to a loan rate of 7-8%. It looks like I would be losing money if I take out a policy loan. Any thoughts?

    • Insurance&Estates
      A
      Insurance&Estates

      Jacque,

      Your analysis is correct. Guardian Life would not currently be a company we would recommend for IBC. If you are interested in seeing the companies we currently recommend, we suggest you connect with Barry Brooksby at barry@insuranceandestates.com with a contact number and he will reach out to you.

      Best, I&E

  • jeffrey Haber
    jeffrey Haber

    waiver of premium only goes to age 65.

  • Anthony Barba
    Anthony Barba

    I am interested in a hybrid long term care insurance policy for myself and my wife.

    • Insurance&Estates
      A
      Insurance&Estates

      Anthony,

      Thank you for the inquiry. We will reach out to you shortly.

      Sincerely,

      I&E

  • jeff

    If you would to talk about Direct Recognition, one would assume you completely understand it.
    Clearly you do not.
    D.R. does not mean your dividend is lowered if you take a loan out.
    It means it is adjusted if you take a loan out.
    In many circumstances the dividend payable after a loan is higher.
    If you want to be informative you also must include that on new policies Guardian offers choice after the 10th year. No other company does this after issue.
    Guardian also offers a 4% guaranteed loan rate after 20 years and age 65.
    It is important to know with a variable loan interest rate, loan rates go up faster than dividend increases, you could easily find yourself on the wrong side of the curve.
    I am sure all you infinite bankers are aware the the sales load Guardian charges on PUA is one of if not the lowest in the industry.
    Guardian also offers one of the only indemnity attached LTC riders in the industry.
    BTW on a previous page you said beware of Guardian agents substituting an l99 for a ten pay.
    Before you demean an entire sales force , you may want to get your facts in order.
    FYI, I spent 20 years with Guardian and no current affiliation other than being licensed as a broker……the same as Nelson Nash

    • Insurance&Estates
      A
      Insurance&Estates

      Thank you for the feedback. We appreciate Guardian and we appreciate you bringing attention to the company. All the best in your endeavors.

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